Hematopoiesis is a complex developmental process that involves stem cell generation, followed by the commitment of multipotent progenitors and the differentiation of mature blood cells within distinct lineages. Seminal to these intricate events is the coordinated activation or repression of various hematopoietic transcription factors that function combinatorially to direct lineage-specific gene expression. In vertebrates, many of these factors have been identified based on their role as trans-regulators of blood cell expressed genes or their characterization as loci that are chromosomally interrupted or rearranged in specific leukemias. A hematopoietic system also exists in the model organism Drosophila and recent studies have demonstrated that genes essential for blood cell development in the fly represent functional homologues of certain of the hematopoietic factors found in higher eukaryotes. Concerning transcriptional regulators, the utilization of fly genetics has allowed for the rapid functional analysis of the GATA factor Serpent, Friend of GATA factor U- shaped, and Runx-related protein Lozenge in blood cell specification and differentiation. This proposal further analyzes aspects of the expression, interaction, and function of these essential regulators and novel hematopoietic reagents will be used to screen for additional genes required for this complex process. The research objectives will be to characterize the expression and function of a newly discovered blood cell isoform of Serpent, determine the specialized roles of Serpent and U-shaped in the distinct cellular events of embryonic and larval hematopoiesis, and conduct a genome-wide screen for genes that function in crystal cell specification and differentiation. Since recent studies have demonstrated a compelling cross species conservation of genes controlling hematopoiesis, the characterization of these known transcriptional regulators and newly identified genetic players should provide needed insights into fundamental mechanisms controlling blood cell production and their disorders, including leukemia in humans.